ED Issues New Delay of Borrower Defense Rules

By Karen McCarthy, Policy & Federal Relations Staff

After the Department of Education's (ED) indefinite postponement of borrower defense issued in June was challenged in court by 19 state attorneys general, ED issued time-specific delays in the Federal Register today, with the opportunity for public comment.

Interim final rules delay the effective date of borrower defense rules, originally scheduled to be in effect as of July 1, 2017, until July 1, 2018. In addition, a Notice of Proposed Rulemaking (NPRM) would further delay the effective date until July 1, 2019. Public comments on both the interim final rules and NPRM are due on or before Nov. 24, 2017 and must be submitted through regulations.gov. As noted in the Federal Register, ED will consider comments on the further delayed effective date only and will not consider comments on the wording or substance of the final regulations.

Re-negotiations on borrower defense are scheduled to begin in November and are not affected by the interim final rules nor the NPRM.

Until July 1, 2019, ED would continue to process borrower defense claims under the existing regulations that will remain in effect during the delay so that borrowers may continue to apply for the discharge of all or a part of their loans. Under the existing 685.206(c), the borrower may assert as a defense against repayment, any act or omission of the school that would give rise to a cause of action against the school under applicable state law.

 

Publication Date: 10/24/2017


Aesha E | 10/25/2017 3:53:49 PM

I agree with Dave's comments. I'm a member of the Assisting Displaced Students Working Group, and it's really hard to hear stories from students about how their lives have been devastated by their experience, or how they're unable to find the work that they were led to believe was easily attainable upon completion of their program. I've also spoken with several students who have submitted claims with no response from the Department months later. It's simply not fair for these students to be left in limbo, nor for them to be punished for the misdeeds of some bad actors who engaged in misconduct.

David S | 10/24/2017 10:37:17 AM

I know that some colleagues will applaud this, as it delays - possibly eliminates - some regulations that could be a burden on resources. But (and full disclosure, I was on the Negotiated Rulemaking committee that worked on these regs), what's at risk here is the integrity of not only Title IV programs, but higher ed in general. I've spoken with former students of the schools whose actions triggered these regulations, and it's not an exaggeration to say their lives were ruined by highly unethical practitioners. Our students can't wipe away their student loan debt by declaring bankruptcy, yet Corinthian College can go bankrupt and walk away from the chaos with no liability. That's just not right, and the Department needs the authority and the tools to prevent that from happening in the future. As aid professionals and as taxpayers who would then be on the hook for these schools' fraudulent behavior, we should expect nothing less.

Delaying these rules draws into question whose side ED is on right now.

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